Ex-SEC attorney agrees to settle conflict claim

DALLAS — A former high-ranking Securities and Exchange Commission attorney has agreed to pay $50,000 to settle charges that he violated federal conflict of interest standards by providing representation for disgraced financier R. Allen Stanford, the Department of Justice announced Friday.

The agreement heads off potential civil and criminal cases that could have been filed by the government against Dallas attorney Spencer Barasch. The former enforcement chief in the SEC’s Fort Worth office had been accused of improperly representing Stanford in front of the SEC after leaving the agency in 2005.

Malcolm Bales, the U.S. attorney for the Eastern District of Texas, said the fine, the maximum amount allowed under the law, shows the government is serious about cracking down on former federal officials who attempt to use their influence in the private sector.

“There should be zero tolerance for people who serve the public and then go into the private sector and use (that service) for personal benefit,” he said.

Barasch, currently a partner with the Dallas firm Andrews Kurth, could still be barred by the SEC from practicing in front of the commission, Bales said.

Barasch’s attorney, Paul Coggins, said in a statement his client “vigorously” disputes any suggestion he compromised his ethics. Barasch settled with the government “to avoid the expense and uncertainty of protracted litigation,” Coggins said.

“For over 17 years, Spencer Barasch served the SEC and his country with integrity and distinction, and he has carried the same high standards of ethics and achievement into private practice,” Coggins said.

Stanford has been jailed since being charged in 2009 with orchestrating a massive Ponzi scheme that bilked investors out of $7 million. His trial is scheduled to begin Jan. 23 in Houston.

In the settlement with Barasch, the government asserts that he was involved in SEC decisions that resulted in the commission not pursuing Stanford. Then, after leaving the agency, he represented Stanford in connection with SEC proceedings even though he was told by the commission that he was permanently barred from doing so, the government alleges.

The agreement also includes a rebuttal from Barasch, who contends that his actions regarding Stanford at the SEC were influenced by “directives and pressure” from superiors in Washington who wanted his office’s resources directed toward financial and accounting fraud instead of Ponzi schemes.

Barasch also contends that he was never told he was permanently banned from representing the Houston-based financier.